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Judgment issued on FTC complaint against marketing practices

A Canadian telemarketer agreed with the Federal Trade Commission to an injunction and financial consumer redress stemming from charges the company, doing business as Fusion Telekom, violated the FTC Act and the Telemarketing Sales Rule (TSR) when it marketed and sold calling cards. The judgment, including monetary awards, applies to the company and two of its officers.

The FTC’s complaint charged that Fusion misrepresented to consumers that the company was affiliated with the consumers’ banks. According to the complaint, Fusion charged consumers $1 for a seven to 10 day trial period, $19.95 for an activation fee, and $49.95 a month for unlimited long distance calling.

The FTC charged that Fusion frequently did not send calling cards and often failed to refund money to consumers who had been charged and never received a card. In some instances, the FTC alleged the company charged consumers $24.95 without any notice. Finally, the FTC compliant alleged that Fusion called consumers whose number are on the National Do-Not-Call Registry and failed to pay the fee to access the registry’s phone numbers. According to the complaint, these acts constitute a violation of Section 5 of the FTC Act and the TSR.

The U.S. District Court for the Northeastern District of Ohio issued a stipulated final judgment enjoining Fusion from future violations of the FTC Act and TSR and levying a monetary judgment of $3.46 million to redress consumer harm. All but $10,000 of the judgment was suspended due to the defendants’ inability to pay. This judgment can be fully reinstated if the defendants failed to fully disclose their assets.

The injunction also prohibits the defendants from selling, renting, or transferring any information, including customer lists and other customer data, and requires the company to file compliance reports for three years and maintain certain records for six years.

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